On May 29, 2003, the Honorable David Hittner of the United States District Court for the Southern District of Texas entered a default judgment against G. Christopher Scoggin ("Scoggin"), a Houston-area author of the investment newsletter "Stock Talk" and website "Stocktalknews.com," arising from Scoggin's violation of the antifraud and antitouting provisions of the federal securities laws (the "Final Judgment").

In its Complaint, the Commission alleged that Scoggin violated the federal securities laws by making repeated false representations in connection with his stock picks appearing in his newsletter and on his website. The Complaint alleged that Scoggin purposefully misled investors by: (i) misrepresenting that his stock picks were a product of "independent" research, rather that the product of his undisclosed financial and other contractual obligations to the companies he promoted; (ii) failing to disclose that the issuers of the stocks he featured were paying for his recommendations; and (iii) engaging in "scalping" in two of the stocks featured in his newsletters and website, i.e., he encouraged his readers to buy the featured stocks despite his undisclosed intent to sell his own positions in those stocks.

The Final Judgment permanently enjoins Scoggin from further violating Section 17(b) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The Final Judgment also orders Scoggin to pay $2,136,007.96, comprising $531,454.62 in disgorgement, $174,553.34 in prejudgment interest thereon, and $1,430,000 in civil penalties for Scoggin's thirteen violations of the federal securities laws. The Final Judgment also permanently bars Scoggin under Section 603 of the Sarbanes-Oxley Act of 2002 from participating in any future offering of any penny stock.

Additional information concerning the Commission's civil enforcement action against Scoggin can be found in Litigation Release No. 17690, August 20, 2002.